A worldwide hops (a flower used in brewing) shortage made stouts, ales and other specialty microbrews more pricy in 2008. Gayle Goshie, a hops farmer, blamed overproduction for hops' previously cheap place on the agricultural market. The glut pushed many hops farmers out business, which gradually helped hops prices recover. Suppose farming hops is a perfectly competitive market. How did farmers going out of business help hops prices recover?
A) Fewer farmers cause the market supply curve to shift leftward, causing price to rise.
B) Fewer farmers cause an increase in market demand, causing price to rise.
C) Fewer farmers cause an increase in the surviving firms' costs, causing higher prices.
D) Fewer farmers cause the individual firms' supply curves to decrease, causing higher prices.
Correct Answer:
Verified
Q400: Q401: "Higher ethanol production definitely and directly raises Q402: "Higher ethanol production definitely and directly raises Q403: Martha's Cleaning Services is a perfectly competitive Q404: What is one reason why would corn Q406: "Perfectly competitive firms have total control over Q407: What are the requirements for perfect competition? Q408: What is a normal profit? Q409: Do firms in perfect competition advertise their Q410: Hubert's Copy Services is in perfect competition.![]()
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents